NEW YORK (Reuters) - Bermuda-domiciled Signet Jewelers Ltd. reported higher-than-expected quarterly profit as the operator of the Kay Jewelers chain benefited from strong holiday sales and gained market share in the US.

Signet, which also operates Jared The Galleria of Jewelry chains in its US market and H Samuel and Ernest Jones stores in Britain, said the distress of many rivals in 2010 helped it win market share. The US market accounted for 76.5 percent of company sales in the holiday quarter.

"Significant store capacity left the US specialty jewelry marketplace in calendar 2009 and we believe that many of the remaining firms are less able to compete due to financial pressures," chief executive Terry Burman said in a statement. Zale Corp , Signet's main US rival in the middle market, has struggled with vendors reluctant to extend credit and dwindling sales. Zale is currently seeking investors for an injection of capital.

A number of other US rivals such as Fortunoff and Finlay Enterprises have also gone bankrupt in the last year.

Signet said its US market share doubled in the past decade to nearly 9.4 percent in fiscal 2010.

The company reported net income of $117.2 million, or $1.36 per share in the fourth quarter that ended January 30, 2010, compared to a loss of $424 million, or $4.97 per share, a year ago.

Overall Signet sales rose 7.1 percent to $1.2 billion.

Analysts had forecast a profit of $1.26 per share on sales of $1.18 billion, according to Thomson Reuters.

As of January 30, the group operated 1,913 stores, of which about two-thirds are US locations. Sales at its stores open at least a year rose 5.2 percent.

Same-store sales in the US were up 7.4 percent during the quarter, but fell 1.5 percent in Britain. In contrast, Zale's same-store sales fell 11.2 percent during the holiday quarter.

Signet reported that its gains were continuing so far in its 2011 fiscal year, with same-store sales up 6.4 percent worldwide in the first seven weeks. Sales showed signs of stabilising in Britain, where they have dipped only 0.1 percent so far this quarter.

Signet shares were up 30 cents from a closing price of $28.08 on Wednesday on the New York Stock Exchange.